News
Slowdown has led to boost for Spain’s long term property rental market
The economic downturn has led to a significant rise in the number of people renting a home in Spain for the long term with strong demand from nationals and foreign residents, new data shows. Overall the Spanish rental sector has doubled in the last five years, according to the data from the country’s National Statistics Institute and figures also shows that yields are up to 7.6% for long term lets. Indeed, improving yields has prompted many investors to turn to Spain as the next buy to let destination of choice with data from Idealista showing that yields have increased from 4.7% a year ago, to 5.3% currently. Popular tourist areas, such as Las Palmas de Gran Canaria offered returns of up to 6%. A modern, one bedroom apartment with sea view can be rented out for €700 per month, while a spacious three bedroom townhouse with sweeping views of the bay and port costs from as little as €145,000. Nor is it just tourist areas that offer strong returns. The highest yielding area, according to the Idealista figures, is the Catalonian regional capital of Lleida, where returns have reached 7.6%. A two bedroom, three bathroom, high spec apartment with balcony there can be picked up for €207,800. The news that Spanish rents rose for the first time in seven years in the first quarter of 2015 is further attracting the interest of buy to let investors with their eye on solid returns. According to Fotocasa, the average price of rental accommodation rose by 2.8% during the first quarter of this year, to €6.96 per square metre per month. Added to all of this is the surge in demand from tenants, with the size of the rental sector more than doubling from 7% just over five years ago to 16.6% in 2014, according to figures from the National Statistics Institute's Continuous Household Survey. ‘The past few years have seen a significant increase in the number of people in Spain looking to rent property on a long term basis,’ said Martin Dell, Director of Kyero.com, the portal which lists property sales, holiday rentals and long-term rentals. He added that Kyero's long term rentals site has experienced strong demand, from Spanish nationals and from foreign residents, while the firm’s sales site has received interest from investors looking to build up buy to let portfolios while property prices remain low. While more than half of rented homes house foreign tenants, Spanish nationals are increasingly looking to rent due to the flexibility that doing so provides. Following nearly a decade of high unemployment, the Profile of the Tenant in 2014 study has revealed that labour mobility is the main reason that many opt to rent a property rather than purchase one. The same study provides an interesting insight into the average tenant, who is aged between 35 and 44 years old, married and with a university education. They are professional tenants with families. Some 22% are looking to rent due… Continue reading
Over a third of UK self-employed think they can’t get a mortgage
Some 38% of self-employed people in the UK interested in taking out a mortgage are concerned they’ll never get one because they work independently, new research has found. On top of this 63% of microbusiness owners think the self-employed have to jump through more hoops than traditional employees, with it being especially difficult for those new to freelancing. And 61% think mortgage advisors do not understand their financial situation while 45% think mortgage providers don’t want them as customers, according to the research carried out by IPSE, the Association of Independent Professionals and the Self Employed. The research also found that 61% believe it’s more difficult to supply the financial information required when applying for a mortgage if you’re new to independent working To ensure more self-employed people can access a mortgage, IPSE is calling for mortgage advisors to be given better advice on independent working and a Government review into lending to independent professionals. ‘Getting a mortgage is a major concern for the self-employed, despite 4.5 million people choosing to work independently in the UK. The whole culture around mortgage lending to the self-employed needs to be changed to accommodate the modern way of working,’ said Chris Bryce, chief executive of IPSE. “It’s crucial that better advice is given to mortgage advisors to provide them with a better understanding of independent working to ensure the self-employed are treated fairly. A dedicated member of staff is another way to achieve this,’ he pointed out. ‘The Conservative Party made a commitment to review mortgages for the self-employed in its business manifesto and we look forward to working with the new Government on this important area,’ he added. According to Paul Winter, chief executive of the Ipswich Building Society, too many credit-worthy borrowers with unusual circumstances are overlooked by mainstream mortgage lenders. ‘Our view is that mortgage misfits, including the self-employed, freelancers and contractors, should have the same level of choice and access to the mortgage market as any other group,’ he said. IPSE has issues some top tips for the self-employed seeking a mortgage. Top is ensuring that you have proof of income as self-certifying your income is a thing of the past and you now need to show you earn the money you say you do. If you have a company, this can be company accounts, otherwise other proof may be needed such as paid invoices, or even pay slips from employed work in a similar field over the last two years. Applicants also need to show that they will continue to get work and this can be done by showing you have had contracts renewed in the past or showing you have worked lined up. If you do not you may need to show you can meet mortgage payments with saving for at least a couple of months. … Continue reading
Research reveals differences of opinion on UK first time buyer market
There is a wide difference between prospective first time buyers and their parents with regards to their perception of the first time buyer market in the new UK. New research shows that while just 12% of parents believe it is ‘virtually impossible for first time buyers to obtain a mortgage’ this rises to 21% of actual prospective first time buyers. The Generation Rent Report from the Halifax Building Society shows that in recent years parents and renters were both more pessimistic about the first time buyer market. However, with improving economic conditions and an increasing number of first time buyers since then, both parents and prospective first time buyers have become more optimistic although more than a fifth of renters still believe it’s virtually impossible. Despite increased optimism from parents the report also found that first time buyers moving back in with Mum and Dad is a growing issue, and in 2015 some 28% of parents said their children moved back to their family home, compared to 24% in 2012. Looking at how parents have supported their children in buying their first home, it becomes apparent that direct parental contributions towards the costs of a mortgage have remained steady. While a contribution towards a deposit has remained the single largest type of contribution the numbers have remained steady. The only increase in the last four years has been those helping with the actual costs of moving house. Some 57% of parents who own a property reported to having contributed, or planning to contribute, towards their child’s deposit, compared with 24% of parents who rent. And 24% of parents who own said that they were, or plan to be a guarantor on a mortgage compared with just 7% of parents who rent. As parental help is evidently more important for the people who want to get on the property ladder, it is interesting to note that parents who own their own home are more likely to help their children than those who rent. This clearly emphasises the importance of property ownership for the prosperity of future generations. ‘The report shows a clear divide between parents and their children as regards optimism over getting on the housing ladder. In reality there are more mortgages available which require a 5% deposit and first time buyer numbers are increasing,’ said Craig McKinlay, Halifax mortgage director. ‘But whether it is giving their children a cash lump sum or providing a roof over their heads while they save, it is clear the bank of mum and dad will have a role to play in helping their children get on the property ladder for the foreseeable future,’ he added. Continue reading
